How a Foreign Bombardment Rescued a Dying Theocracy from Its Own People
To the observers of geopolitical folly:
In my years of studying how value is created and destroyed, I have learned that the most expensive mistakes are not the ones born of ignorance. They are the ones born of certainty. When someone is absolutely sure they are right, they tend to bet the whole farm. And when the farm in question happens to be the Middle East, the bill arrives not in dollars alone but in lives, stability, and consequences that compound for generations.
On February 28, 2026, the United States and Israel launched Operation Epic Fury against Iran. The stated objectives were ambitious: dismantle Iran’s nuclear program, neutralize its ballistic missile capabilities, and—though officials danced around the word—effect regime change. The opening salvo killed Supreme Leader Ali Khamenei himself, along with dozens of senior officials. By any military scorecard, this was a spectacular opening move.
And yet, I would argue it was one of the most consequential strategic blunders of the twenty-first century. Not because of what it destroyed, but because of what it saved.
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The Dying Patient Nobody Bothered to Wait On
Let me paint the picture of Iran as it stood on February 27, 2026—the day before the bombs fell.
The Iranian rial had collapsed to 1.75 million against the dollar, having lost roughly 20,000 times its value since 1979. Inflation was running north of 60 percent. The Ministry of Social Welfare had reported that 57 percent of Iranians were experiencing some level of malnutrition. Meat had become a luxury. Seven million citizens were going hungry. The country’s GDP had contracted from $600 billion in 2010 to roughly $356 billion, despite $193.5 billion in oil export revenues over the preceding five years. Where did all that money go? Into missiles, proxy armies, and the offshore accounts of men in turbans—but certainly not into the stomachs of ordinary Iranians.
Beginning December 28, 2025, the largest protests since the 1979 Revolution erupted across all 31 provinces. These were not the usual university students waving signs. The movement started in Tehran’s Grand Bazaar—among the shopkeepers and merchants who, historically, were the very class that powered the Islamic Revolution itself. When the bazaar closes in Iran, it is the equivalent of Wall Street’s trading floor going on strike: the commercial heart of the nation has stopped beating.
The regime’s response told you everything about how frightened it was. It killed—by conservative estimates—at least 7,000 protesters, with internal Ministry of Health figures suggesting the toll may have reached 30,000 in the first 48 hours alone. It imposed the longest internet blackout in the country’s history. And in perhaps the most revealing detail of all, it imported militia fighters from Iraq, Lebanon, Afghanistan, and Pakistan to shoot its own people, because—and I quote a former IRGC member—“it is very difficult for Iranian forces to kill Iranians, because they are the same people.”
When a regime must outsource its repression because its own soldiers hesitate to pull the trigger, that regime is not governing. It is gasping.
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The Most Expensive Rescue Operation in History
Now, here is where the story turns from tragedy to farce. On February 28, just as this dying regime was running out of bullets and credibility and imported militiamen, the United States and Israel provided it with the one thing no amount of money could buy: a foreign enemy at the gates.
There is a principle in business that I have seen repeated countless times: a failing company that faces an external crisis often survives longer than one left to collapse under its own weight. The external threat unifies the board, rallies the employees, and—most importantly—gives management someone else to blame. The Iranian regime, which was two months away from what multiple serious analysts described as “the hardest year in the Islamic Republic’s history,” suddenly had the ultimate excuse.
The bombs that fell on Tehran did not merely destroy military infrastructure. They destroyed the protest movement. They replaced the chant of “Death to the Dictator” with the instinct to duck and survive. They turned a population that was ready to overthrow its government into a population that was huddling in underground parking garages while toxic smoke from burning oil facilities blanketed their city of ten million.
I have always believed that in both investing and geopolitics, the question to ask is not “What will this action achieve?” but rather “What would have happened if we did nothing?” If you held a stock in a company whose management was embezzling funds, whose customers were fleeing, whose employees were in revolt, and whose balance sheet was hemorrhaging cash—would you bomb the building? Of course not. You would wait. You would let the internal contradictions do their work. You would let gravity take its course.
The Islamic Republic of Iran was that company. Its management was corrupt beyond redemption. Its customers—the Iranian people—were in open revolt. Its balance sheet was catastrophic. Its currency was approaching what economists politely call “dysfunctional.” Every serious analysis published in January and February 2026 reached variations of the same conclusion: the regime could not survive 2026 with its power intact.
And then we bombed it.
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The Compounding Costs of Impatience
Let me enumerate what this impatience has cost us, because the bill is staggering and it will keep compounding.
First, the direct financial cost. Operations of this scale run approximately $25 billion in the first week alone. If historical patterns from Iraq and Afghanistan hold—and they always do, because war costs are like termites, invisible until the floor gives way—total expenditures will reach $75 to $100 billion even for what the administration calls a “limited” campaign. That is money that will not build bridges, fund schools, or reduce the deficit. Every dollar spent on a Tomahawk missile is a dollar that did not earn compound interest in the American economy.
Second, the energy shock. Iran’s closure of the Strait of Hormuz—through which 20 percent of the world’s oil supply transits—produced what the International Energy Agency called the largest supply disruption in the history of global oil markets: 8 million barrels per day removed from circulation. Brent crude spiked to nearly $120 per barrel. The IEA coordinated a release of 400 million barrels from strategic reserves, the largest such release ever, and the market shrugged it off. Countries from Bangladesh to Pakistan to the Philippines were forced to shorten work weeks and close universities because they could not afford to keep the lights on.
Third—and this is the cost that will compound longest—the strategic cost. A protest movement that was organically dismantling the Iranian regime from within has been replaced by a war that has unified what remained of the regime’s base, installed Khamenei’s son Mojtaba as the new Supreme Leader, and given the IRGC the one narrative it knows how to exploit: “We are under attack. Rally behind us or perish.” The regime that was dying of internal rot is now dying of external wounds—and external wounds, unlike internal ones, generate sympathy.
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A Note on Timing
In investing, time is a friend of the wonderful company and the enemy of the mediocre one. The same principle applies to regimes. Time was the Islamic Republic’s mortal enemy. Every day that passed without intervention, the rial fell further, more businesses closed, more Iranians went hungry, and more soldiers questioned whether they could keep shooting their neighbors.
The U.S. Treasury Secretary himself had bragged—in public, on camera—about engineering a dollar shortage that sent the rial into freefall and protesters onto the streets. The strategy was working. The patient was dying. All we had to do was wait.
Instead, we performed emergency surgery on a patient we wanted dead. We cauterized the wound of internal dissent with the fire of external aggression. We replaced a slow, organic, internally driven transformation—the kind that produces lasting change because the people own it—with a violent, externally imposed shock that will produce resentment, radicalization, and another generation of Iranians who associate America not with the ideals of democracy but with the sound of bombs falling on their children’s schools.
One hundred and sixty-eight people died in a girls’ elementary school. I will not pretend to know whether that strike was intentional or accidental. But I know this: those 168 families will not be attending any pro-American rallies. Nor will their neighbors. Nor will their city. The footage from that school will recruit more enemies of the United States than every drone the IRGC could ever manufacture.
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The Thank-You Letter That Will Never Be Sent
If the surviving leaders of the Islamic Republic were honest—and they are many things, but honest is not among them—they would send a private letter of gratitude to Benjamin Netanyahu and Donald Trump. It might read something like this:
“Dear Bibi and Donald,
Thank you. In December, our people were in the streets. Our currency was worthless. Our soldiers were refusing to shoot. We were importing gunmen from four countries just to keep the lid on. The bazaar—the bazaar!—had turned against us. Every serious analyst in the world was writing our obituary.
And then you attacked. You killed our Supreme Leader, which was admittedly inconvenient, but you also killed our revolution. You gave us back the one thing we had lost: relevance. You reminded our people that whatever they think of us, there is something they fear more—foreign bombs falling on their homes. You turned us from oppressors into victims. From tyrants into defenders.
We could not have purchased this gift at any price. And you delivered it for free.
With deepest appreciation, The Islamic Republic of Iran”
Of course, no such letter exists. But the sentiment is real, and it is the cruelest irony of this entire catastrophe.
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The Lesson
Charlie Munger once said that the first rule of compounding is to never interrupt it unnecessarily. I have applied this wisdom to investments. I wish someone had applied it to the slow, painful, but ultimately promising compounding of internal pressure that was dismantling the Iranian regime from within.
The Islamic Republic was not going to fall on February 28. It might not have fallen in March. Perhaps not even by summer. But the trajectory was unmistakable and, more importantly, it was irreversible—because you cannot fix an economy when your military consumes the budget, your currency is in freefall, your people are starving, and your own soldiers will not fire. These are not problems that resolve themselves. They compound.
What we did on February 28 was the geopolitical equivalent of selling a deeply undervalued asset at the worst possible moment—driven not by analysis but by impatience, not by strategy but by the intoxicating certainty that action is always superior to patience. It is the same error I have watched investors make for last years: the inability to sit still while the thesis plays out.
The Iranian people deserved better. They deserved the chance to author their own liberation, in their own time, on their own terms. Instead, they got Operation Epic Fury—which was epic, and was certainly furious, but which accomplished the remarkable feat of saving a theocracy from the only force that could have destroyed it: its own people.
History will judge this decision harshly. And history, unlike markets, does not offer a second chance to buy at the bottom.
Respectfully,
Husain
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